In his excellent reportage, “mapping the brain’s inner language” (NYT Feb. 26, p. 7), James Gorman tells how R. Clay Reid left a top job as Harvard Medical School professor, to join the Allen Brain Institute in Seattle, in 2012 (an institute funded by a huge grant from Microsoft scion Paul Allen). He did it, for the freedom to research the mouse brain. Why? Because many kinds of research can’t yet be done on humans, and the brains of mice and even flies “share common processes with the human brain”. In particular, Reid has tackled the million neurons in the mouse’s visual cortex. The visual cortex is the part of the cortex that processes visual information; it’s in the back of the brain (see above).

Harvard too has a mouse project. The Human Connectome project (after the ‘genome’ and ‘proteinome’ projects) tries to build a structural map of the mouse brain, down to the amazing level of packets of neurochemicals at the tips of brain cells!

How do Reid and other neuroscientists study the mouse brain? First, a mouse is trained to look at an image. Then, it learns to press a lever when the original image appears, among several others. Reid studies what happens in the two second period, during which the photons of the image hit the retina, the brain sends info to the cortex, the neurons in the cortex do some computation, and send a message to the mouse’s paws to press the lever. This is a complex process involving genetics, electricity, and chemistry. It is revealed in electron micrographs that show every neuron and every connection in the mouse’s visual cortex.

In the end, Reid notes, the brain features the ‘molecules’ that underlie behavior.

Understanding how the brain processes information and then tells us to act on it will be a huge breakthrough. It may help us cure awful neurological diseases (ALS, Parkinsons). Perhaps, one day, as we mark the 100th anniversary of the outbreak of World War I, a terrible war no one wanted that needlessly, stupidly, killed 16 million people (civilians and soldiers) and wounded 20 million more !, we will understand the parts of the human brain that create senseless violence and death.

What in the world is helping the U.S. dollar defy gravity, keeping it from falling relative to other currencies? The U.S. economy’s recovery is weak, job creation is awful, President Obama is incompetent, the Congress is deadlocked, and America is turning inward, or returning to its traditional isolationism. Moreover, the Fed continues to print dollars (by buying $85 m. worth of Treasury bonds monthly). There is an enormous overhang of printed dollars out there.

China has lots its appetite for buying dollars. According to Floyd Norris (New York Times, Feb. 22-23/2014), China bought a net $48.5 b. worth of U.S.Treasury bonds last year. This is $20 b. less than in 2012. China now holds $1.27 trillion in Treasury bonds; together with Japan, this amounts to 42 per cent of the total $5.8 trillion in Treasuries held by all foreigners.

There is a great science fiction plot here. What if those foreign Treasury holders decided to spite the U.S. by dumping their dollar holdings? The dollar would crash, stock markets all over would drop, and an enormous crisis would result. Why would anyone do this? Well, America has plenty of ill-wishers out there. The fact is, the fate of the dollar, and the U.S. economy, is now in the hands of Chinese, Japanese and others, who hold vast amounts of U.S. assets.

By great good fortune, just as China is easing off its dollar purchases to support the dollar, Japan, under Abe and his “Abe-nomics”, has stepped up its buying. Japan bought a huge $71.3 b. in Treasuries in 2013, up from $53 b. in 2012. Japan is now the single largest purchaser of dollar assets. Of course, Japan does this to weaken the yen and help its exports. So far, it isn’t working too well.

It is significant that the American public, including the banks, slashed their holdings of U.S. treasuries. Clearly everyone knows that interest rates aren’t going down, they’re going up, which means Treasuries are going down, which means we should be selling them. Apparently, foreigners are more bullish about the dollar than Americans are. Not a good sign.

Right next to Norris’ column is an account of Fed discussions during the 2008 crisis. It is very disturbing. It shows how clueless the Fed Open Market committee was, especially after the Lehman bankruptcy, and how the Fed continued to worry about inflation, when the pressing problem was in fact deflation. It seems that not only are there no competent political leaders left in power, there are no competent economic and financial leaders either.

“Tiger Mom” is back. Amy Chua, who wrote a book about her tough approach to raising her two daughters, as an Asian Mom, (Battle Hymn of the Tiger Mother, 2011) has a new book, co-authored by her husband Jed Rubenfeld: The Triple Package.* In it, they make a claim that several ethnic groups excel in America – Jews, Mormons, immigrants from China, Cuba, Lebanon, India, Iran, Nigeria — excel, because they are different. They have the triple package. First, impulse control, or self-discipline. Second, self-belief, self-confidence, almost a feeling their ethnic group is superior. Third, prejudice, or inferiority complex – the feeling they are persecuted, hindered, so they have to do like Avis – try much harder. The authors make the claim that America in general is lagging because it lacks the triple package – especially, when everyone is trying to make others feel self-confident, worthy, avoiding frustration, and when ‘no child left behind’ focuses on the laggards rather than the geniuses. The ‘self-esteem’ movement, which wants everyone to feel good about themselves, seems to prevent tackling big challenges that might – heaven forbid – damage our self-esteem though (G-d forbid)…the F word, failure!

The book has been pilloried, as racist and worse. It is not. My parents were immigrants. And they indeed tried harder. And they imbued me with the same ethic. Since when does the thesis that immigrant groups bring energy and the desire to excel become racist?

The fierce criticism Chua and Rubenfeld have absorbed suggests they may have touched a nerve. In a society that fosters instant gratification, impulse control and self-discipline are becoming rare. Some groups still have it. They seem to succeed. Is that racism? Or realism?

Microsoft has a new CEO, to replace veteran CEO Steve Ballmer. He is Satya Nadella, 47 years of age, born in India, and he has been on the job for 17 days. He’s been with Microsoft for 22 years; previously he worked for Sun Microsystems. He’s a computer engineer.

Nadella was interviewed by the New York Times’ Adam Bryant (Feb. 21). In the past, Microsoft has never missed an opportunity to miss an opportunity. MS, Gates and Ballmer missed the Internet, smartphones, you name it, they missed it. Only flexibility and alacrity, the ability to recover, kept Microsoft alive. Gates was able to mobilize his forces, tell them up front we missed this one, then engage them in catching up. Microsoft is great at catching its foes from behind…usually.

Nadella’s interview shows he understands what the key questions facing Microsoft are. And by the way, any large organization, competing in global markets. Here are some his observations. They are right on the mark.

“We (MS) have operated as if we had the formula figured out, and it was all about optimizing. ..Now it is about discovering the new formula. [What he means here is, MS was great at operational discipline, ‘optimizing’, but now it needs some radical innovation, ‘the new formula’.] So the question is, how do we take the intellectual capital of the 130,000 people and innovate, where none of the category definitions of the past will matter? Any organizational structure you have today is irrelevant because no competition or innovation is going to respect those boundaries.”

Take note, organizational experts. Don’t waste your time on your company’s organizational structure. It is irrelevant. You are being attacked by innovative startups that don’t even have one.

“Everything now is going to be much more compressed in terms of both cycle times and response times.” MS is a huge elephant. It has to learn to dance, in Lou Gerstner’s phrase, because its competitors salsa, rather than waltz.

“You have to be able to sense those early indicators of success, and the leadership has to really lean in and not let things die on the vine. When you have a $70 b. business something that’s $1 million can feel irrelevant. But that $1 m. business might be the most relevant thing we are doing.”

He gets it! MS has ignored important innovations in the past, because they were too tiny to merit attention or managerial time. But they were the disruptive innovations that changed the world.

“What people have to own is an innovation agenda, and everything is shared in terms of the implementation.”

“One of the things that drives me crazy is …”this is how we used to do it.” Or….this is how we do it”. Both are dangerous traps. The question is: how do you take all of that valuable experience and apply it to the current context and raise standards.”

Those indeed are the issues, Satya. Good luck to you. Now let’s see if you can deliver. You don’t have a whole lot of time.

Reading my wife’s copy of the American Psychological Association’s MONITOR magazine, I found an article citing a study by John Cacioppo, showing that “the perception of loneliness” is closely linked to higher rates of mortality.

It is the perception that is the problem. “It’s not being alone or not” that affects your health, Cacioppo says. “You can feel terribly isolated even when you’re around other people.” And indeed some people actually enjoy being alone.

But there are those who perceive that they are alone, no matter how many friends and relatives they have to interact with. Loneliness can make people feel chronically threatened, and this emotion can wear on the immune system.

We’ve known for a long time that our emotional wellbeing is directly, physiologically, linked to our immune system. I have several friends who have experienced highly stressful situations and have fallen ill afterward. Apparently, the feeling of being all alone, with no one there to ‘catch our back’, is one of those emotional stress factors.

I wonder whether Generation Y, the ‘connected generation’, the kids who permanently, 24/7, connected to one another by their smartphones, will feel less lonely than the older generations, when they cross 50. I wonder whether a cell phone SMS is a good substitute for a face-to-face hug or smile. I guess we will find out.

I guess one action item emerging from this is: If you’re feeling lonely, find a friend; if you know someone who’s feeling lonely, be a friend. You may save a life. And it may be your own.

* John Cacioppo, et al. Loneliness: Human Nature and the Need for Social Connection, 2008. [study of 2,100 adults ages 50 and older].

The BBC World Service program Health Watch recounts this morning how British cancer researchers, with a burst of creativity, have enlisted cell phone games to help them cure cancer.

Here is the story.

An intensive British study of the genetic foundations of breast cancer has revealed a number of genes related to the illness. It is complicated by the fact that breast cancer is not just one illness, but perhaps 10 different ones. This study involves study of massive amounts of data, much harder than finding a needle in a haystack. It requires identifying “peaks and troughs” in data, to find places where gene defects are linked to breast cancer.

Someone had the brilliant idea, that the human eye is terrific at pattern recognition, better than perhaps software. So why not create a game, Genes in Space, in which people with idle time, who play games on their cell phones, could view gene data, in the form of ‘peaks and troughs’, and play a game in which you get points for finding those peaks and troughs. It’s a real gripping cell phone game, perhaps not quite Angry Birds, but close, involving destroying threatening asteroids, etc.

One ‘formula’ for creativity is X+Y. Find an X (search for genes related to breast cancer), and a Y (cell phone games), and find a creative novel useful way to link them, in a way that has not been done before. The British researchers have done that. They use the idle time of people to do something useful.

Great idea, team. Are there other ways that we can use Angry Birds technology, to do good for humanity, instead of just burn time?

In 2005 Lego (the Danish company that makes plastic bricks) surprised the world with its hit video game Lego Star Wars. Since then, there have been 15 released, published by Warner Bros. The latest is The Lego Movie Videogame, based on the hit 3D The Lego Movie, #1 in North America! In the Lego video games, everything is made from Lego pieces.

But there is a catch. According to Stephen Totilo, writing in the Global New York Times (Feb. 13), “those pieces can be built into only one thing, whatever the game designer intended them to form.”

This is extreme irony. The whole beauty of Lego blocks, of which I am a lifetime fan, having played with them with our four children and today, with our dozen grandchildren, is that you can imagine, dream and make anything out of them. Why in the world did Lego dump this crucial aspect? It reminds me of the cartoon I pasted above my desk: “Teacher: ‘I insist that you kids all be creative and imaginative – and do exactly as I tell you.’ “.

There is an alternative. The Swedish 2011 virtual building-block game Minecraft lets you build absolutely anything you wish, anything you can dream. And it’s a huge success.

Lego vs. Minecraft. This, in miniature, is the dilemma of our schools. Teach kids the right way, the only way… or teach them to find their own way, other ways, imaginative ways.

We need Minecraft schools. But how in the world do you create them, when our educators seem unable even to imagine them. It seems the Lego bricks we use to build schools lack a few key pieces — the ones labelled “think different” and “let your imagination soar”.

Shirley Temple Black passed away on Feb. 10. She was 85. She became famous when she began a movie career when only 3 years old, and in 1935, when she was only 7, won a special Academy Award for her movies. As a child star, she once made 8 movies in a single year. During the Great Depression her movies brought joy and relief to millions. Shirley Temple’s signature song was The Good Ship Lollipop, which sold 500,000 sheet music copies.

Child movie stars often have troubled adolescence and adult lives. But Shirley Temple figured it out. She realized that her ringlets and precocious acting, singing and dancing would evaporate when she grew older. After an unhappy first marriage, she married Charles Black and became a diplomat, serving the United States in the United Nations and as Ambassador to Ghana and Czechoslovakia.

When asked what her secret was, she said, with a smile: Start early.

The BBC recounts a great Shirley Temple story. She was once invited to The White House to meet President Roosevelt and his wife Eleanor. When the First Lady was bending over, Shirley (who was a tomboy) pulled a slingshot out of her pocket and fired a stone at the First Lady’s rear end. Eleanor Roosevelt stood up with a start. The Secret Service scoured the room… but no one suspected the curly-haired little angel.

Shirley Temple’s life shows us that most of us, perhaps all of us, will need to reinvent ourselves and our careers at least once, when our skills and capabilities are made irrelevant by the rapid pace of change. We can do as Shirley did, and simply move on, adapt, adjust and find something new, or we can wallow in bitterness and regret. Like Shirley Temple, each of us needs to think well in advance, what will I do next, when what I do now is no longer relevant? And it’s best to start now.

Build Your Dream (BYD) is a Chinese electric-car company, which I’ve written about before. It was founded by a genius Chinese scientist Wang Chuanfu, who invented a revolutionary lithium ion battery, then decided to build cars around it.

BYD just announced (Financial Times, Feb. 10) that it will launch London’s first ever all-electric taxi fleet today (Tuesday). It thus beats London Mayor Boris Johnson’s deadline for all London’s taxis to be zero-emission by 2018.

BYD has thus won the race against Nissan, and London Taxi Company (LTC, which makes the iconic black London cabs). LTC is now owned by the Chinese carmaker Geely.

The BYD cabs can be ordered by smartphone apps (like Hailo and Uber); they have a range of 186 miles and will use a network of battery chargers installed by British Gas across London.

BYD currently runs fleets of all-electric taxis across China, in Colombia, Hong Kong, and soon in Singapore.

As an aging economist (Ph.D. 1967), I want to propose a vote of thanks to the psychologists. They have saved my discipline from total irrelevance.

We economists for years asked, how can people, and countries, earn more and grow wealthier? How can we make more money?

Alas, it turns out, I and my colleagues were asking the wrong question. We ruined our planet by striving for continual economic growth, and created massive inequality in wealth and income distribution that is destabilizing nations and the world, by preaching extreme free-market theory that contributed to the 2008 financial collapse. Good work, economists.

So, what is the right question?

How can we SPEND our money better, both as individuals, as families, and as nations? Not how can we make more of it.

They begin by asking, if you dug into a jacket pocket stored since winter, and found $20, would you spend it on yourself, give to a homeless person, or buy your partner a bouquet of tulips? They ask this, because “how people spend their money may be at least as important (for their happiness) as the amount of money they have”.

In their experiment, they gave people on a university campus $5, or $20, and asked them to spend it by the end of day. Half of the participants were told to spend the money on themselves. Half were told to spend the money on somone else (prosocial spending).

That evening, “people who had been assigned to spend the money on someone else reported happier moods over the course of the day than did those people assigned to spend the money on themselves”. And the amount of money the participants received had no bearing on their perceived happiness.

Interestingly, the economists’ fallacy prevails in our perceptions. “When we described the experiment to other participants, …they believed that they would be happier spending more money ($20 rather than $5) and that they would be happier spending it on themselves.”

In other words: We believe that selfishness promotes our happiness, and we believe that more (money) is better than less, two of the axioms of economic theory.

And we are wrong.

So, thanks psychologists! At the end of the day, just before I fall asleep, I review my day and what I achieved. Invariably, a day when I did something good for someone – family, friends, strangers – is one that leaves me falling asleep smiling. And when I wake, I remind myself to do things that will create that feeling later that evening.